Early loan repayment is sometimes a daunting task which many person's struggle to do. This is seen as the most challenging reason why many individuals refuse to patronize financial companies that provides loan for businesses and people who need to solve urgent needs.
Some even go as far as blocking their credit card to prevent the loan service providers or microfinance banks from debiting them their overdue loan.
Well, in this article we have detailedly explained some of the good benefits which individuals will get if they pay their loan early, please stay tuned!
What is Loan Repayment?
Loan repayment is simply the process of paying your outstanding loan which is due for payment. Some loan repayment plan ranges from one (1) week to six (6) months depending on your loan provider or micro finance bank.
Repayment method includes repaying via your master or credit card, bank transfer, physical payment or any other legal means.
This heading is necessary for those who are new to online loans and need to know what a loan repayment is.
Benefits of Early Loan Repayment
Here is the list of some of the benefits associated with early loan repayment:
1. Increased Credit Score
When you pay your outstanding loan early you get a good credit report which reflects on your credit score and aids in increasing it. Failure to repay outstanding loan usually leads to the loan provider reporting your bank verification number (BVN) to financial institutions which will lower your credit score and likely prevent you from getting jobs in the future.
2. Maximizes Borrowing Capability
Early repayment of loan helps in building a trust flow between you and your loan company and overall makes them trust you by providing higher loan amount for you and also extending your loan repayment plan. Overall, if you pay your loan early you will get increased amount to borrow whenever you need and also an extra extension of months or days for repayment.
3. Peace of Mind
This is undoubtedly the most important factor anyone would consider while borrowing or trying to borrow loan from a loan company. When you pay your loan early you will have peace of mind due to the reduced pressure you were getting because of the outstanding debt and you will also be able to plan your finance towards other important things.
4. Protects Your Image
Paying outstanding loans early will save you from likely public disgrace and embarrassment that occurs to person's who fail to pay up their outstanding debts. Usually such people are treated with disrespect as the loan provider may go as far as calling their relatives and contacts, asking them to report the person to the police as he is a criminal for failure to pay he's over due loan.
Conclusion
We have thoroughly discussed some of the benefits associated with paying your loan early which are; increased credit score, maximized borrowing capacity, peace of mind and protection of ones image. We encourage you to repay your outstanding loan early as it will go a long way in benefiting you!
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